Local bond market going strong; over S$1b raised from 8 deals in March

THE Singapore bond market is perking up, with activity this month more than three times that in the same period last year.

Including Wednesday's CWT Ltd issue, there have been eight issues so far this month, raising over S$1 billion. For the same period last year, there were five deals worth S$335 million.

Year-to-date, the SGD bond market is still some ways behind. From Jan 1 to March 9, there have been 29 deals worth S$2.83 billion, which is 63 per cent of the S$4.49 billion raised in the same period last year, also from 29 transactions.

The expectations of higher interest rates are not putting off investors so long as the yield is attractive, said Clifford Lee, DBS Bank head of fixed income.

"Many investors in response to rising interest rate expectations have a few strategies; they can go short on tenure so that duration risk is lower and invest in higher yielding bonds," said Mr Lee.

He noted also that across Asia, the US dollar bond market is back solidly after a wobbly start at the beginning of the year and the SGD market is following suit.

Year-to-date, G3 currency bonds, which are mainly bonds denominated in US dollars, Asia ex-Japan, there have been 62 issues worth US$35.8 billion. In the same time last year, there were 69 issues worth US$34.6 billion.

Logistics company CWT is selling five-year bonds on Wednesday with an initial price guidance of 4.8 per cent, according to a term sheet seen by The Business Times.

There is significant interest, and orders have reached over S$100 million, said a source.